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    Scrap Empty Property Tax, says CLA
30/10/08

CLA Wales is backing a call by a group of the largest property owning companies for the government to scrap or amend legislation covering business rates on empty properties. Companies with a combined market capitalisation of £370bn have written to Gordon Brown in a move co-ordinated by the British Property Federation with Property Week magazine.

Rural property

Companies began paying full rates on vacant properties for the first time this year, following an initial grace period. The measure was introduced in the pre Budget report and has been criticised as an extra financial burden on an already struggling property sector.

Campaigners say the tax is stifling regeneration and extends to many other companies and to local authorities which also have to pay the tax. They include companies from AstraZeneca and McDonald’s to Next, Tesco and Nokia, as well as Land Securities, British Land and Canary Wharf. Segro and Brixton estimate that the tax will cost them £8m and £5m this year respectively.

The letter asks for a 50 per cent relief on the tax for shops and offices for two years, and an indefinite stay on industrial buildings. The government scrapped a former relief for empty properties in April and estimates the move could generate up to £1bn in extra revenue.

CLA Wales chairman Ross Murray says it is within the remit of the Welsh Assembly Government to re-introduce the reliefs. He has taken up the issue with the Welsh Assembly Government, and warns that there’s a clear lack of understanding of the needs of rural business.

He says: "This tax used to be, and quite rightly, a tax on occupation. It is now a blatant fund raising exercise and has become a tax on enterprise. It is a stupid tax and will ultimately be self defeating.

"It has been a huge blow for rural regeneration and will discourage owners of rural buildings from redeveloping as the prospect of a tax on an empty property will undermine any viability.

"Parts of Rural Wales, where there is limited demand for offices and workplaces, will see investment dry up, and historic old buildings go into decline."

The Communities and Local Government Department said there are no plans to bring back the empty property rate relief but the position is kept under review and the government has engaged with industry and local authorities to understand how the reforms are working overall.

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